Articles / getting great tenants
How to find a Good Tenant
by Mj Gladding 10.04.06
Wouldn't it be great to get tenants like the two guys pictured above?
Bill Gates and Donald Trump are probably not going to be filling out one
of your tenant applications !
Read on . . .
Have you ever had
to actually find a good tenant to rent out one of your apartments, duplexes,
or condo units?
If you have not, then maybe you have sold something in the newspaper, or
put something out on your lawn w/ a "For Sale" sign. Remember all
those people that called you? Well, multiply that by hundreds. There is a
huge housing shortage in this country.
All those people will be calling you for your one apartment. A lot of them will have bad credit, no rental history, not enough income, you name it. If you have a 2 bedroom apartment, they may tell you that they can fit themselves and their 4 kids in there. They might tell you that they are homeless and need a place to live by the end of the month.
I work in an office where people literally cry in front of me because they have no place to live. It's awful. I feel terrible, but when you are a landlord, you need to have a structured application process. Otherwise, you can end up with a problem tenant that you are unable to get rid of. Consider the following:
1. There is truth in advertising! If you are advertising in a local paper, make it clear in your ad that there is a term lease and a credit report required in order to be considered for the apartment. You will save yourself a lot of time and needless phone calls.
2. Run a credit report.
If a person has a poor history of paying rent, mortgages, utility bills or
credit cards, this is a red flag not to be ignored. In my office, we have
a standard score of 600 on the credit report. If the tenant does not have
at least a 600, then the application is denied.
3. Get previous landlord references.
No one knows this person's habits better than the people whom they have rented
with before. Type up a list of questions for the person to answer regarding
the applicant's history. Did they pay their rent on time? Have they ever
been late? Did they do any damage to the apartment? Did they give you false
information? And my personal favorite, would you rent to this person again?
If the person does not have a rental history, then ask for written character
references.
4. Be pet friendly.
When I was a single gal, I had a 6 year old boxer who was and still is the
best dog in the universe. She was quiet, no barking, no messes and she
loved everyone. I had a terrible time finding an apartment that would accept
pets. My question is, why not? I have seen a lot of apartments with more
damage from children and adults than with a pet. So, get a pet deposit
from the tenant and make them responsible for cleaning up after their animal.
5. Look at the person's gross monthly income.
The average person should spend about 30% of their
gross monthly income on housing. So, if a certain individual is only grossing $1600 a month, he
will probably not be able to afford $750 per month in rent. After taxes
are taken out of their paycheck as well as other monthly and weekly expenses,
there is not enough left to live on and pay their rent.
Tenant Selection can be the most excruciating process unless you take the time and effort in maintaining a structured application process. You will hear complaints and excuses from many during the process, but it will be a value to you in the end when you get good tenants as a result of your extra effort as a landlord.
